Don't let it get away!

When Ford (NYSE: F) took the wraps off its impressive new Fusion sedan on Monday, analysts and industry watchers (including this humble Fool) immediately started pondering the possibilities: Would this be the car that would finally knock Toyota's (NYSE: TM) Camry off its best-selling pedestal?

The answer to that question isn't simple. Toyota has had its troubles but retains fierce consumer loyalty, but a couple of days after the car's debut, another question struck me: Could the Fusion -- specifically, the Fusion Energi, a plug-in hybrid version that's due later this year -- be a problem for Tesla Motors (Nasdaq: TSLA) ?

A potential wrench in Tesla's works?Tesla, of course, is on track to launch its all-electric Model S sedan later in 2012 -- a launch that will be the make-or-break moment for the audacious Silicon Valley startup. That launch will almost certainly be a success, at least initially -- Tesla has thousands of preorders (and $5,000 deposits) and has already said that the initial production run is sold out -- but for Tesla to succeed as a business, the Model S has to get sustainable sales traction, to find customers beyond the circle of well-heeled gadget geeks and early adopters who ponied up all those deposits.

That's where things start to get complicated for Tesla, and that's where the Fusion Energi could represent a problem -- or at least the beginning of one -- for the upstart automaker. The Model S's value proposition is that it's new technology, it's green (you won't use any gas), it's practical, and it's in a stylish package from an exciting new company.

But what if there was an alternative that was also attractively packaged, just as practical, and nearly as green (you won't use much gas, and you might go for days without using any at all) -- but from a stable, trusted automaker that isn't some crazy startup out in California? That's the Fusion Energi -- a "plug-in" hybrid version of Ford's hot new sedan. While it'll have a gas engine along with its electric drivetrain, the "plug-in" feature means you'll be able to charge it up at home -- and drive for a while without using a drop of gas.

Oh, and it's probably going to be a lot cheaper than the Tesla, too. Ford hasn't announced specifics yet, but my semi-educated guess is that the Fusion Energi will be priced at or a bit below $40,000. Compare with the Model S, which starts at $57,400 for a stripped-down base model and goes up (sharply) from there as you add range and features.

You see where I'm going with this?

Tesla shareholders, ponder this carefullyI can hear the Tesla fans howling already, but hear me out: There's an important point here. Yes, the electric-only range of the Fusion Energy is likely to be something like 40 miles, versus the 160 miles you'll get in that entry-level Model S, but how long is the average daily commute? And while greentech purists will scoff at the idea of buying a car that uses any gas, those aren't the people Tesla needs to win over.

The purists, at least the ones who can afford it, have already put money down for a Model S. It's the people who are intrigued but skeptical, who are today driving a comparably priced car like a BMW or a Lexus, that Tesla needs to win over to get to sustainable profitability.

Now, maybe those people won't be interested in a pedestrian Ford, even one that (like the Model S) comes with a high-tech aura and borrows more than a bit of its styling from sleek Aston Martin coupes. But here's the thing I want you to take away: There are going to be a lot more cars like the Fusion Energi making their debuts in the months to come -- and some of them will be smack in the Model S's price range.

And it's a safe bet that Honda (NYSE: HMC) , which is beginning the same kind of product-line overhaul that Ford went through a few years back, will have some significant green vehicles to announce in the coming months -- as will Ford's own upscale Lincoln brand, which will emphasize advanced green technology in all of its new models.

It's true that none of these will offer quite the same kind of cachet that Tesla has worked hard to cultivate for the Model S. And it's possible that none of them will be able to match the 300-mile electric-only range of a fully loaded Model S, at least not right away. Those two factors alone will win Tesla some sales, no matter what else comes along. But on the other hand, all of them will offer something Tesla can't -- the peace of mind and wide support network one gets when buying from a long-established automaker. And in the case of the hybrids, the peace of mind of having a tried-and-true technology -- that gas engine -- to fall back on.

How much of a difference will that make? We'll find out. But Tesla shareholders who don't take these competitive threats seriously may be in for a rude surprise.

Tesla is an intriguing story, but the Fool's analysts have selected a different company that they believe is poised for tremendous growth in the coming year. You can learn more about this great stock in their new special report: "The Motley Fool's Top Stock for 2012." It's completely free for Fool readers -- get your copy.

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One more thing that I would be concerned about with the Tesla. It is confined to where it can go. It would tend to take the fun out of driving on a spur of the moment long distance trip that ends up much further than you originally planned. Not so with the plug in hybrid which offers a green commute and the option for the long distance drive without the restrictions.

Will this Fusion have to ability to carry 5+2 people? The cargo space of a small SUV? Cost about 1/8 to fuel up compared to traditional 18mpg vehicle? Do 0-60 in the mid 5's (or 4.4 if you opt for the performance model)? Have 5-star crash ratings in every category (one of Tesla's main goal)?

You're comparing 2 totally different cars. No, the Tesla cannot drive from San Diego to San Francisco without recharging, but Tesla is going to be installing super chargers along main corridors which will allow you to charge to 80% in something like 30-45 minutes. That should be enough to stop, eat, take a bio break and continue. Do you really drive for 8 hours without stopping for an hour or so?

The Tesla is in the class of a BMW 5-series/MBZ E-Class/Audi A6. Go compare your 40 mile range econobox to a Prius.

It is interesting what has just happened to our TSLA, with the dropping of the 2 engineers. Let me shine some light on this company, and how insignificant this news is, from a real perspective, not from a media bashing standpoint.

You all need to have faith in this company. In the long term, and I'm talking over the next many decades, Tesla will be a DOMINANT company in the auto sector, and will only grow from its debut.

Yes, besides the roadster, they have yet to produce cars for the public, but once they have their facility in full swing, demand for these high-end, pure-electric cars will increase and increase over the years, REGARDLESS of what other companies are releasing as their attempts for "Green" cars.

What some people might not realize, is that there is only ONE company that is even close to rivaling Tesla for quality of product, which is the Nissan Leaf, and TRUST ME, this leaf has some serious performance issues that have not been displayed in the media. Reply to this message with #leaf if you want me to bash the Leaf as much as I can, but this message is not about bashing the Leaf.

As far as I am concerned, NONE of the other car manufacturers are even on the same playing field as Tesla. They shouldn't even be compared together. But because so many of you are stuck thinking gasoline is the best way to go, I will still compare them for you.

First of all, All of the cars mentioned in the above Fool article are HYBRIDS(-leaf) and not pure-electirc. which means they must have both components of a Gasoline/diesel engine and a battery operated motor, both with transmissions and fuel lines, and radiators and whatnot, ALL strapped under the same car. Because of space restraints, not only do you have to compromise of the size and power of EVERYTHING, but you are also increasing the weight of the car immensly. Compared to Tesla at least.

Not to mention their actual battery drive distance estimate is at best 40 miles, which is absurd to think that as an acceptable charge distance, I bet most people will be disappointed to see that the battery needs charging well before that 40 mile mark. Who doesn't charge their smartphone battery at 20%? it runs on the same type of battery, just more cells. So after that 40 miles, you are back to using your gasoline engine to either recharge the battery or to actually run the car. Either way, you have a half-ass electric car and a half-ass gasoline engine, both of which cannot do much on their own. It seems like a waste to have to use both just to be able to use one, as well as pay for Gas and Electricity and the HUGE maintenence of both, just to keep the car running.

So, Not only is Tesla's BASE model estimated for (160mi) 4x the distance of these new hybrids, but the power is exceptionally better as well. Tesla is proud to have a motor and power train system far superior than anything else available. The fact that Tesla's motor can produce massive torque(which provides quick acceleration), on as low as 1 RPM, destroys the advantage even high end gas cars have. The Model S Beta has been tested and BEAT cars like the Porsche 911 in a race. Hands down.

Okay, sure the Tesla motor wins in performance, but there is another big part of the picture that sets Tesla apart from these hybrids.

Design.

You cant beat the light weight, the aerodynamics of the underside or space availiable in the Telsa. Because of the sleek battery having its weight dispursed over the full of the car, it doesn't provide pessure points to axels as a block battery in the hybrids do. The Tesla doesnt require a heavy engine, nor a gas tank, or even pipes for intake/exaust. #TSLA screams of EFFICIENCY. The Center of Gravity is so low compared to traditional cars, that the handling is a million times more stable and safe to drive. And they have seating for 7!? or 5 and alot of trunk space, not to mention a small compartment in the front hood.

And Tesla will continue to do this for as long as cars shall live.

We have all talked about gasoline eventually running out. Why go half ass at it when you can get something far superior, that is availiable now?... well, real soon! I say just don't bother with media influences about other Hybrid cars (or even the leaf), because None of them can make a car like Tesla, and None of them can change the present into the future like Tesla. The Hybrids can try to keep a consumer base, and try to evolve to somewhere near to Tesla, but they will fail as long as they remain hybrids. Tesla will be properous for long after gasoline is unavailiable.

IF you have faith in #TSLA, you know this play is for the LONG . and that all others will be crushed in attempts. And besides, the higher price tag of Tesla vehicles, means more income and perhaps much better profits,which to me is still better than always trying to sell something for the cheapest possible.

You day traders and day worriers should stay in or stay out of this stock, and stop dumping on small bad news like 2 engineers quitting Tesla for personal reasons. They have completed their work already, and have other team members who were immediately ready to fill their position.

Be brave and average down at this low, and know good things are coming. And yes, BEYOND what JP Morgan down quoted it months ago.

Thank you for reading, if you did. But this is just my own opinion about the facts that are availiable.

I do not currently own any Tesla stock, nor their car, but have oogled over the technology that is Tesla for years and understand it is the future of cars, and will only grow from this point forward.

Believe in someone elses words on the internet, or believe my words on the internet. Or believe none. Up to you.

Tesla's ultimate production capacity, for the near future, is going to be only a small fraction of the entire market. Even if they do better than they hope to, they can't possibly build enough vehicles to satisfy all of the potential demand.

The Tesla Roadster was designed to be a test bed for their technology, their service and support model, and to establish that they are manufacturer of high-quality vehicles. Have you seen any indication that they have failed to meet their goals in any of these categories with the Tesla roadster?

The Roadster, and Model S are only the beginning for Tesla, they have already announced the Model X, and no doubt have other models in the design phase.

Follow-up models, according to Tesla announcements, are planned to build on the technological advantage they have established, while reducing prices to make their vehicles more affordable to the masses. That has been the stated goal all along. Did anyone think this could be done in a matter of weeks, or months? This is only the beginning, and so far, the plan has been right on track.

Right now Tesla has the best technology, and the best shot of overcoming range anxiety. So far no other offering even comes close.

Being the first with the most as far as technology goes has always been a good indicator of success. Tesla would have to screw up pretty bad, to do poorly in the market.

Over 90% of all passenger vehicle miles per trip are under 40 miles.

The Tesla Model S is a stunning example of innovative technology and quality workmanship. I have seen the model S, including the stripped-down undercarriage. Have you?? It's simply amazing to see what they have achieved. The model S raises the bar for design innovation, efficiency, and safety, for all passenger automobiles.

It won't be long before a large part of the automobile buying market understands that the hybrids being offered by many manufacturers still burden them with the maintenance, and repair costs of an ICE, that they just don't need.

Hybrids represent auto manufacturer's resistance to change. Once solid pure electric vehicles, that offer competitive range to these hybrids, are available, people will buy them. Tesla is going to be the first manufacturer to have them.

Tesla is making their technology available to other manufacturers. It's only a matter of time before more of them realize that trying to convince buyers that continuing to pay for an ICE in their hybrid vehicle, isn't going to fly. Until another option presents itself, more manufacturers will opt to utilize Tesla's drive train. Tesla simply has the best drive train technology in the world right now. Hybrids are not going to be able to compete with pure EV's in the long run.

Automobile manufacturers are investing Billions, per vehicle, to develop Hybrids, and EVs (Volt, Leaf) that don't come close to Tesla's EV technology , while Tesla has only spent considerably less to date, to develop their entire line. Utilizing Tesla's drive train technology is less expensive than developing their own solutions. The smarter manufacturers have already signed up, so let's see how long it takes for the numbers to sink in for others.

OIL!!! There is no reason to believe that oil prices won't rise significantly in the foreseeable future. Right now, while, the world's economies are in turmoil, oil producers are aware that if they continue to further gouge consumers, they will contribute to financial collapse, and lose in the long run. That doesn't mean that once economies begin to stabilize, they won't resume the march of profiteering

There is considerable unrest in the Middle East,

Supplies of oil are finite.

There is growing sentiment that the dependence on oil has to end.

Tesla could do better than expected. The fact that so many manufacturers are coming out with Hybrids, PEVs, etc. pretty much indicates the potential size of the EV market.

@ RichLemons: "It is interesting what has just happened to our TSLA, with the dropping of the 2 engineers. Let me shine some light on this company, and how insignificant this news is, from a real perspective, not from a media bashing standpoint."

You could not be more wrong. Tesla is in the last months of pre-production testing on the Model S if they want to start building cars for sale this year. This is where you put cars together with the production pieces you want and test them to find out what doesn't work or what doesn't work well, and it's when you do the NHTSA crash testing. It's one of the most hectic and critical times in the entire process for the engineers. For the chief engineer for the entire project and the chief chassis engineer to quit is a big signal that something is very wrong with the Model S.

The two biggest worries at this stage are NVH and crash testing. NVH is Noise, Vibration and Harshness, and it is critical to the perceived quality of a car. Teams that have designed and developed a dozen cars still have to make hundreds of design and assembly changes during pre-production to fix NVH issues before production of customer cars can begin. If the Model S can go 160 miles before recharging is going to be irrelevant if the car buzzes, rattles and clunks like an '85 Yugo at highway speeds on real roads. (BTW - The massive rear hatch is going to be a mother to keep quiet.) NVH is everything, especially in the luxury market Tesla wants to play in, and the guy responsible for getting it right just quit.

Nailing down NVH is hard, but I see three things with the design of the Model S that are going to make passing crash testing unusually difficult. If anything goes wrong here, they can't sell the car - period.

The first challenge is Tesla's decision to use an aluminum monocoque chassis. There are only a few cars built this way and that means there isn't a deep body of knowledge on how you need to adjust the design for the different way aluminum performs in a crash. Computer aided-design is only as good as the data you have to plug into the system. This is a company building its first car and they don't have anyone on staff who has designed an aluminum chassis for a production car.

The second thing that raises my eyebrows is the 5+2 seating arrangement. Even if the aluminum materials isn't an issue, it's going to take some incredibly clever engineering to pass rear-end crash testing when the rear seats are positioned behind the axle in an area normally usually used for a crush zone.

The last trouble area is the integrity of the battery in a side collision. The Chevy Volt got some unwanted notoriety last month when it was revealed that a small coolant leak in the battery after side collision testing caused a fire. This happened even though the Volt's battery is mounted in the center tunnel and under the back seat. The Chevy's battery was broken because the impact hit a small brace that ran from the center tunnel to the outside edge of the chassis. Move the impact point of the crash six inches in either direction and it's not a problem, but since the impact happened where it did Chevy still has to fix the Volt so the battery won't leak after a moderate side collision.

Now look at the battery for the Model S. It is a plank that runs almost the full width and length of the passenger compartment. Tesla told CNet in 2010 that the battery itself was supposed to be a brace to limit cabin intrusion in a side impact collision. (Link to that article and pictures of the battery pack below.) For that to happen, the battery pack has to take most of the energy from a side collision. They can design the car and the battery pack to do that, it literally means they're using the batter like a door beam. But there is no way they do that and prevent the battery cell from rupturing and losing its coolant and/or suffering an electrical short from crushing when its hit by a 3000-pound sled moving at 30mph. Things that protect the passenger compartment need to be sacrificial. If they protect the cabin from intrusion but then catch fire it's kind of defeating the purpose.

If the battery is nearly the full width of the car, and it's used as part of the side impact protection, how big a hit will require a new pack? How much will that cost? What will insurance be for something like that?

Engineers bailing out while they are finalizing the design and starting production is never a good sign, especially for such a niche segment vehicle with so many competitors coming out with new models...

@JPWhiteHome: If you really want 300 miles of range in your Model S, you'll have to option it way up -- and you won't get much change from a $100,000 bill once you do. The $50k number everyone throws around only buys you half that range, not much more than your Leaf or the new Ford Focus Electric.

That's not really a game changer. If Ford (or Toyota, or GM or Honda or VW or Nissan or Hyundai or BMW or Mercedes) was wiling to invest in an EV that had an MSRP that high, they'd be able to give you 300 miles of range too. Range costs money, plain and simple. There's no game-changing technological magic involved, just more battery power. But they aren't developing such products -- at least not yet, because they don't think a sufficiently large market exists for them at that price point. If Tesla proves otherwise, that will change very quickly -- count on it. But meanwhile, they're focused (so to speak) on developing products that are affordable while waiting for emerging economies of scale to bring battery prices down. And that's happening: This discussion is going to be very different in 3-4 years.

@Jazzenjohn1: "If the battery is nearly the full width of the car, and it's used as part of the side impact protection, how big a hit will require a new pack? How much will that cost? What will insurance be for something like that?"

Good question, I hadn't thought of that angle.

I don't know how much of a hit the cell can withstand before being replaced, but the cost of the 300 mile cell is estimated to be in the $40,000 range.

Insurance cost will depend on the results of the crash tests by NHTSA and the IIHS, and the parts prices when Tesla publishes them. Premiums could easily be in the high sports and luxury car range. Or insurers could refuse to write policies except for very limited use, as they do with some exotics.

Wow IMHO, both baldheadeddork and RichLemons swung the pendulum a little too far, so ...

@ baldheaded dork, and @ RichLemons

1)w/r to the Crash test: the Tesla Model S did pass with a score of 100% the 2011 crash tests. You can google it there's even a YouTube video, so there's no reason not to expect it won't pass the 2012. Although I do tend to agree with badlheadeddork that the rear facing seats maybe a problem, I did not probe enough to know if the vehicle tested in 2011 was indeed equipped as such. But TSLA stockholders (disclosure I'm long), don't totally despair, there are a slew of vehicles on the road today that have rear facing seats so the concept is not new to engineers.

2) w/r Engineers: You can also google, especially Friday and Saturday financial blogs to find out that one engineer left to return to Europe for family reasons, that engineer has been replaced by someone in the industry with similar design experience. The other engineer had "fully transitioned" off the Model S prior to departing some 4 months ago now. In my industry "transition" means that one leaves well and transitions work to others. So it would appear that his work at least was filled in-house at worst.

I could go on about other holes in your two posts, but I think this is enough to show how the truth of this "crisis" is somewhere in between your two views.

BTW, Tesla's website itself has a video from the former engineer touting, evaluating and making a case for many aspects of the design mentioned in both of your posts. ;)

I'm seriously thinking of increasing my position in TSLA.

BTW2, Tesla has massive deals to supply Daimler/Benz (Smart) and Toyota (RAV4) with batteries ... brain freeze, ... I forgot where I was going with this, but it may be relevant, take it or leave it. :)))

1) Nice try. The crash test video Musk showed at NUMMI last October only showed the front impact test. If there is a problem it's going to be with the side test, as I made clear in my post.

Also, that was a private test, not the NHTSA certification. The NHTSA test won't happen until the rest of the design is frozen. Otherwise they might have to retest if anything related to safety or structural integrity was changed to fix a problem, like if a seat mount was altered to fix a NVH issue.

Tesla's website says they "intend" to achieve the 2012 5-star rating from NHTSA. (That's how the test is graded, not by percentage) According to the NHTSA 5-Star database, no Tesla model (including the Roadster) has ever achieved this rating. Have a look for yourself.

2) I know what Tesla said about the departures, but having worked in the industry I'm not buying it. The only family reason that will get you out of pre-pro without ruining your career is a dying (not just seriously ill) child or spouse. Pre-production is the #1 cause of divorce among auto engineers, a senior engineer like Rawlinson or Sampson is going to work 14-15 hour a day for 6 or 7 days a week for the last 6-9 months before the build is frozen for production.

One of the reasons you don't quit is because you can't just plug in someone who hasn't been on the project. What Tesla is telling you is BS, and whatever your industry is it's not like the car business. The top chassis and project engineer do not "transition" off a car as it gets close to production because they know more about the car than any two people on Earth. These guys they picked up from VW may be good engineers but chassis design is incredibly complex and it will take at least several weeks for them just to have a half-informed understanding of the design. Whoever steps into Rawlinson's shoes has to learn the whole car and the intricacies of the Tesla's unique systems.

About Rawlinson's videos promoting the technology - that's part of the job when you're the lead engineer for a project. And, those videos were made before the Volt test and perhaps before he had a full understanding of the problem with a Li-Ion battery when it loses coolant.

Last, Tesla's deals with Daimler and Toyota wouldn't make it one of the 100 largest suppliers in the US. A $100 million deal (Toyota) spread over three years is miniscule. The Smart EV deal is a lot smaller than that, and both deals have very high component costs. If you want to value TSLA as a supplier you need to knock at least one zero off its market cap.

1. The $50k 160 mile range version goes 0 - 60 in 6.5 seconds and has a top speed of 110 mph

2. The starting price for the 300 mile range version is $69,900 after federal tax credit and goes 0 - 60 in 5.6 seconds with a top speed of 125 mph

3. The almost $100k version has a 300 mile range and goes 0 - 60 in 4.4 seconds with a top speed of 130 mph.

How fast or fun to drive is a ford fusion hybrid going to be? Can it get to 60 in under 8 seconds? Can it even go 60?

The big automakers might be some competition in the future but right now they aren't even close. Tesla has many patents on its electric powertrain components that big companies like Toyota and Daimler have to license from them when they make an EV.

Maybe next time you can write an article on how Nissan is going to crush Lamborghini with the much cheaper and more fuel efficient Versa.

We rented a 2012 Fusion last month and drove it 2300 miles in 10 days, with the overwhelming amount of miles driven in a 4 day period. I've heard nothing but good things about the Fusion. We currently own an 03 Taurus, and I've been very happy with the car, but the Fusion really pleasantly surprised me. The gas mileage was great, with a fully loaded car and driving about 80 mph on the Highway on average, we still averaged just over 30 mpg. The seats were extremely comfortable, the car handled like a much more expensive car, was quiet, and I couldn't get enough of the Sirius XM radio. One thing which really impressed me was the visibility from the headlights at night, I've never had a vehicle that had anywhere near the forward visibility . Ford is on the right track with great cars like the Fusion, and of course, the F 150 and larger super duty trucks are the absolute best in class and have been forever. I think the F 150 has been the number 1 selling truck in America for about 30 years in a row, and there is a reason for their dominance.

2. Assuming 50% of the car buying population in the U.S. buys electric vehicles, who is going to build the power plants to power them? And what are you going to fuel those plants with? Coal? Nuclear? Natural gas? Don’t sound too “green” to me, no.

3. So tell me why I should spend $50,000 plus for a car that I can drive for maybe 2 hours before looking for a place to recharge it. Don’t sound too practical if I wants to visit the kids in Ohio, the Left Coast, or BIL in Florida to me. Maybe if I was a 30something engineer making $250,000/year and it was my third car . . . .